The market seemed to be in a celebratory mood today as Overseas markets rallied and importantly Iron Ore shrugged off its recent shackles and popped up above $111.We sprinted out of the blocks and never really looked back. In the final countdown the ASX 200 closed up 40 at 5376 with a low at the open of 5347 and a high of 5394. Miners led the way with BHP Billiton Limited (A$36.55, +1.8%), RIO Tinto Limited (A$63.67, +2.1%) and Fortescue Metals Group Ltd (A$5.33, +3.1%) at the front of the cavalry charge. Mid-caps did even better in this space with Arrium Limited (A$1.375, +5.0%),Atlas Iron Limited (A$0.98, +3.7%), Bluescope Steel Limited (A$6.14, +2.0%),Mount Gibson Iron Limited (A$0.825, +6.5%) and Iron Road Limited (A$0.245, +2.1%) all going nicely. Banks of course were firm as news of National Australia Bank Limited (A$35.05, +0.8%) closing some Clydesdale branches and the continuing strength in the UL economy concentrated the minds of investors on a bigger pullback than Dunkirk. Big four all did well as did reformed bad boy Macquarie Group Limited (A$57.44, +1.6%). Insurers better QBE Insurance and Insurance Australia Group Limited (A$5.50, +1.1%) the stand outs.
Industrials were better, everything was better really. Woolworths Limited (A$36.20, +1.9%) and Telstra Corporation Limited (A$5.05, +1.0%) stand outs but discretionary spending did really well with Country Road Limited (A$14.80, +13.8%) up a staggering amount .Bear in mind though that two shareholders own 99.76% of the stock leaving only about 300,000 shares to trade! But boy are they happy shareholders!
Gold’s were mixed with the usual Newcrest Mining Limited (A$10.01, -2.3%) weakness but good to see Beadell Resources Limited (A$0.63, +5.0%) spiking after some pleasing figures. Not sure which sector is worse though gold or mining services as Boart Longyear Limited (A$0.32, -7.2%),Mastermyne Group Limited (A$0.50, -6.5%) struggled but at least the big ones like Monadelphous Group Limited (A$16.72, +2.4%) and WorleyParsons Limited (A$15.02, +1.1%) did well. Property trusts were better too with Stockland (A$3.69, unch),Mirvac Group (A$1.69, unch) and Investa Office Fund (A$3.20, unch)
In the winner’s circle today were Country Road Limited (A$14.80, +13.8%),JB Hi-Fi Limited (A$18.80, +6.4%),Automotive Holdings Group Limited (A$3.80, +5.6%),Syrah Resources Limited (A$3.89, +7.8%),G8 Education Limited (A$4.95, +4.0%),Mount Gibson Iron Limited (A$0.825, +6.5%) and CVO whilst sitting in the corner waiting were Nufarm Limited (A$3.91, -5.3%), ZIM,Karoon Gas Australia Limited (A$2.43, -3.2%),Sky Network Television Limited (A$5.87, -3.3%),Evolution Mining Limited (A$0.87, -2.2%),Sirius Resources NL (A$2.51, -3.1%),Lynas Corporation Limited (A$0.18, -10.0%),Newcrest Mining Limited (A$10.01, -2.3%) and Yancoal Australia Limited (A$0.425, -6.6%).
Volume was not flash but around average I guess at $4.5bn.The Aussie dollar was waiting to see what Uncle Glenn was going to say at the Credit Suisse conference in Hong Kong. No jawboning here as he suggested that the baton was being passed from mining to not sure what and that there were encouraging signs for the economy. Aussie dollar hit 91.75 whilst Gold held steady at $1312 and Bitcons were $620.
Asian markets were stronger, lifted by the US consumer confidence survey. Now come on it’s a survey. Have you ever told the truth when they phone up? Anyway the MSCI Asia Pacific Index added 0.8 percent to 135.40 at lunch in Tokyo, with more than five stocks rising for every three that fell.
Stocks and Stories
Glenn Stevens speaks in Hong Kong about the strengthening economy. The upswing in activity is spreading, of course ‘Sir’ Joe and ‘Sir’ Tone would disagree but next rate move up. But not for a long time.
G8 Education Limited (A$4.95, +4.0%) Superstar of the childcare sector announced they had raised another $100m at $4.60 and then promptly went ballistic. Seems that the market is happy to continue buying these babies despite paying a bit over their usual number for arch rival Sterling. Keep an eye on the CEO’s shoes is all I can say. 28,000 places now at 54,000 bucks a place!
Automotive Holdings Group Limited (A$3.80, +5.6%) also in placement heaven today with a $115m raised at $3.49 to fund their purchase of Scott’s Refrigerated Freightways.
Mobile Embrace Limited were back too after their $11.75m placement being well supported at 26 cents.
Outgoing Coles managing director Ian McLeod says excessive regulation, high labour rates and declining productivity are threatening Australia’s ability to exploit rising global demand for food. Australia has the 6th highest labour costs in the world.
He’s back. Nick Moore not less has done pretty well out of the Millionaire’s factory rise as his stake has climbed $36.4 million in the past 12 months to sit at about $81.2 million.
Austin Exploration Limited (A$0.013, +13.0%) has had a good day with 150m shares traded today as they announced significant oil flows from its latest Eagle Ford shale well in Texas.
Lynas Corporation Limited (A$0.18, -10.0%) is looking more and more like dead man walking as the need for a capital injection take centre stage. Must be an easy short for the bears.
National Australia Bank Limited (A$35.05, +0.8%) struggling UK business is closing 28 branches which it has labelled as ”unsustainable”. Clydesdale and Yorkshire will invest close to $81.5 million in an attempt to shore up its retail banking arm, with $45 million on branch improvements and $36 million on mobile banking.
Tomorrow’s News Today
Medibank Private is going to IPO. Just announced by ‘Sir’ Mathias Cormann
China’s stimulus rumours are swirling that the National Development and Reform Committee has approved five new railway projects.
The games developer behind Candy Crush Saga, King, has been valued at over $7bn after it raised $500m listing on the New York Stock Exchange. It sold 22.2 million shares priced at $22.50 per share – the mid-point of the range the firm had initially set. King’s revenues rose to $1.8bn in 2013, from just $64m two years ago. Amazing. Never played it. Never want to.
The recently privatised Royal Mail has announced plans to cut 1,600 jobs in the postal group’s first big round of redundancies since it was privatised in October.
Whilst the US is preparing to end its QE stimulus, the rest of the world seems to have just discovered it with news that Japan may well increase its stimulus in May if it sees weakening in their economy especially after the sales tax rises.
The UK government is looking to sell 7.5% of its nationalised Lloyds Bank for around 4bn pounds! That should suck out some liquidity. Seems everyone is racing to raise money at the moment and why wouldn’t you.
Brazil has had it debt rating cut by S&P due to “fiscal slippage” cBBB- now.
So here we are five years into the GFC and now the euro geniuses are talking about stimulus. The Head of the Bundesbank is softening his stance now to asset purchases and buying government bonds. And negative interest rates. Obviously worried about the strength of the Euro.
Chinese brokerage Everbright Securities said 2013 net profit fell 79% from a year earlier owing to investment losses from a trading glitch and regulatory fines.
Thought for the day .Remember the days of the tech boom of 2000/2001.It had three mantras. Everything was different this time. Winner takes all and you had to be first. Well did it work out? Of course it’s different this time!